>> april 15, 2010, and tea party rally sparking across the country. thousands of americans protesting taxes spending. tea party catapult republicans to take control of the house of the -- house of representatives.

republicans. welcome, everyone, i am charles payne hosting for neil cavuto. congressman, welcome to the show. in this move by representative boehner coming in to the newsroom. a the tea party is in trouble. there is no doubt about that. you think that john boehner is making a mistake by rejecting tea party? i think the speaker makes a mistake and the tea party is not a group that embraces serious

tangibles of government that is traditionally work in this country. there are members of congress who got elected because, in fact, the tea party activists across the country were involved in the election. the tea partiers and outsiders -- i would remind john boehner that there was a time when he was the outsider that was an annoyance to the party leadership. i understand the speaker being annoyed when he has people within his caucus that are committed to a set of principles that they make it hard for him to make easy deals. but i would also remind him that people are not going to forsake their principles for something that is as insignificant and their life as a committee assignment remark that is right.

>> if he thinks this is a party discipline, he is sadly mistaken. he often knows that from his own experience as a younger time in his service in congress. charles: representative, it has been set from the beginning that the tea party not only poses an incredible threat to the senate democrats, but to establish republicans. now, representative john boehner opportunity to mitigate what they have in washington. >> well, i think what he is doing is looking at -- he is missing the point. the tea party activists are reminding the candidates in the republican party, who eventually do get embraced -- when you are like us you win. when you are like them, you

lose. it has been going on for years. those who say when you stand on the principles of small government and individual liberty, fiscal responsibility, you are attracted to a wider range of voters. >> i have to jump in here. because we have this discussion in december 2010. a lot of people say that a lot of things have changed and americans are voting back. maybe the republicans should work be like their counterparts across the aisle. >> again, let me say that if you want to, if they want to be an echo instead of an opposition. they can do that.

nobody is going to go for the fake imitation. democrats are professionals about big korbel government -- porkbarrel government. instead of the cheap imitation of the republicans trying to be like barack obama. charles: some republicans have done a pretty good job with spending as well. before i let you go, i want to ask about the controversy of freedom works. it is a kind of thing that the mainstream media has been talking about. you let freedom works and a half. give us a little insight into what happened. >> first of all, largely unrelated to the tea party movement. i left there because i had

serious concerns about the ethical and moral behavior of the senior leadership. i don't particularly want to discuss that at length. i think you will be resolved. i am consoled by my certain knowledge that time will heal all wounds and this will be all sorted out. but it has nothing to do with with john boehner's misguided sense, his colleagues, all of who were elected as republicans on the republican ticket. or the notion that people have been dreaming about since 2009, that the tea party will dry up. tea party activists are people who have a long standing commitment to ideals. charles: we appreciate your

help. dick armey, thank you for coming on. kiersten powers joins us now. is that good news for the republicans or the whole country? >> both. look, i think the reason they are losing steam, even the republicans have recognized that it is a problem. i am sure that a lot of people have readdabout the purging. they realize it is something that alienates people. it is not something that would appeal to a broad swath of people. with the fiscal cliff -- with that feeling debacle, i think it was the last straw. people felt they were just too entranced and. charles: here is the thing. we are not the country that needs to be.

we have $16 trillion in debt. forget about the people with the pom-poms. our situation is awful. isn't there a need for a group of regular citizens to voice their discontent with the idea. our children and grandchildren don't have any shot at reclaiming the glory that was once everybody. >> i think what you just said it describes how most of the country feels. everyone is concerned about that. there is room for people that will hold people accountable. what happened with the tea party is they really weren't holding everybody accountable as much as being extremely partisan and a sense of being so intel obama -- anti-obama. but i think that there has to be a sort of allowance. i am not putting this just on the tea party. you get these ideological

purists who want all or nothing. that is just not the way the country works. so i think you have to find middle ground. charles: i have to tell you something. the sort of campaign that i have seen against the tea party, which by the way grew out of the t.a.r.p. situationn it goes beyond someone being to anti-obama. just this week, tim burton said that he has been to tea party rallies and he has heard the n-word spread around. this is a relentless campaign to put people in their place. it seems to me to be totally unfounded and totally unfair. >> i agree with that. i think people go looking to find something to discredit them. and author of "the new york times" wrote a book about the tea party.

"the new york times" is not super conservative, and she found what you said. these are not people who are racist. they are not uneducated people that the media likes of retirement. i think most of them have good intentions. the issue is if you're going to tell your party it is my way or the highway, and if you deviate from this at all, we will come after you. that is not constructive. it just isn't going to work. what you have to do is try to move them and get them to the right place. charles: i guess only the president can say it is my way or the highway. kiersten, thank you so much. the former dec commissioner cochairing. he is going gangham style. >> stop getting on youtube so you can see gangham style.

charles: more from simpson later. but first, the founder of mcafee on the run and we are trying to track him down. the most vocal of sandy's victims is blasting back. find out why coming up next. >> we are the people that are the middle class. ♪

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it's nice to have the experience and commitment to go along with you. keep dreaming. keep doing. go long. charles: another hearing on hurricane sandy today. the victims are feeling that they are not being heard. >> fema is doing nothing. they still keep going around in a circle. a lot it is a joke. charles: this staten island resident says washington is losing focus on hurricane sandy. to be frank with you, from day one, staten island did not

release been high on list of priorities. a lot of people felt that way then. how are you feeling? >> i agree with you. it seems like staten island is a forgotten puddle. you know, we are being forgotten about. i started to wonder is it because it's a republican town? because most people are republicans here. and is this because the majority of people that get loaded for office are republican. the president said when i met with them that fema works for him. and results are going to happen. it still hasn't. charles: i remember that. of course, your outburst at one of these recent meetings, when i thought the first time, i actually had goosebumps because i could feel the passion and pain. also, discussing with the

president of the united states, he meets in certain promises to you. it feels like maybe it was just a photo opportunity. it does not? >> yes, that's what it feels like. again, we have a lot of victims. there are people who have lost their loved ones. the answers are not being given. you know, getting the runaround, the president giving you a runaround. even fema. fema has answered to him, so why are they not? charles: scott, here is another thing. one of the things we did see from people in staten island is that they sort of took a can-do approach to this. the first responders obviously did a fantastic job, but the local businesses have pitched in almost immediately, and they have done a lot of things that you normally would've expected the government to do. do you talk about it being a

republican town. a lot of people are saying that the republicans all of a sudden want government aid. how come the people in never vote for this stuff all of a sudden think that they should be entitled to a? >> well, yes, it is true, the neighbors got together. it was the people from the outer boroughs. different areas. again, they say that they are praising fema and the governor of new york to the mayor of new york to the president. the only time i have seen the governor or mayor, was that the time i saw the president that

day. they are giving applause to the wrong agency. charles: right. before i let you go, we are not going to let you go until you get back on their feet. there is a lot of criticism after hurricane katrina. there are images thaa are seared into our minds. and he did go there, but do you think if there were a lot of poor black people on staten island, do you think they would've gotten more sympathy? >> i don't know. everybody blamed george bush for katrina. they are blaming obama for sandy. i don't know it has to do with our race color. you know, we have middle class people that work here of all colors and all races here. they are the same people that have been here helping each other out. i don't think it has to do with the color. i think it has to do with being

democratic or republican. charles: keep fighting the good fight. we will keep checking in on you. thank you. charles: the economy is scary, but this is even scarier. not the zombies, but the government spending taxpayer money on zombies the boys use capital one venture miles for their annual football trip. that's double miles you can actually use. tragically, their ddy got sacked bblackouts. but 's our tradition! that's rouing the card holder. but with the capital one venture card you get double miles you can actually use. [ cheering ] any flight, anytime. the scoreboard doesn't lie.

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charles: paying for security? it could make us more financially insecure. senator tom coburn saying that homeland security has spent $35 billion in grants to make america safer. but it still can't measure if we are actually safer.

the department is wasting things on zombie apocalypse training and an underwater zombie apocalypse. thank you. i love every year when you come out with this reportt it is absolutely fascinating how washington get so creative wasting our taxpayer money. to your point, are we any safer for all of this? >> i think that is a big question. the urban area security initiatives that were passed in 2003 are important about hardening our greatest risk and cities. 9/11 commission says we shouldn't spend any money unless we are doing it on a risk-based calculation. security initiative all the way up to 66 cities. what is happening is what is intending to harden our cities and make us more resistant to terrorism has now become a real deal grantmaking process.

and they can't tell us is if this will make us any safer. what we want to see is if we are going to spend this money, borrow it from china or our kids, we need to make sure that we are getting our money's worth and it is supporting what we intended it to. which is to increase security of our most humble cities. charles: senator coburn, where does the buck stop on this kind of stuff? these guys have a lot of this money. they can do things like this. is there any specific person who has ever been held accountable for this? >> the people you should hold accountable is not the agency. we are allowing the agency to do this.

we see waste and stupidity. the fact that we don't have a metric to measure, and we don't know how the money is spent, there are no follow-ups, it just shows the competency of the agency, but also the competency of washington in terms of doing what they're supposed to be doing. charles: on that note, we are talking about the fiscal cliff. earlier today, president obama brought the debt ceiling debate, or would be debate into the picture. it feels like a lot of the work that you do -- people say okay, we spent 100 grand on this or maybe watching the shrimp on a treadmill. it's not a big deal. >> is a big deal because the way you eliminate a trillion dollar deficit is a billion dollars at a time. the wavy you get a billion dollars is 100 million or $10 million at a time. so what is our excuse?

can we say that it is okay to waste money and hundreds of thousands of small areas that add up to trillions of dollars? or do we have to look at big areas? what i would put forward is congress isn't doing their job and how they write it and oversight it. i still pick up any of my feet on the ground because the penny is were 3.5 cents. anyone in america who is struggling today, we don't have the luxury of ignoring stupidity and waste anymore. charles: i have less than a minute. i have to squeeze this in here. you think we could be a transitional transformative point in thisscountry where it is okay? where it is okay to spend money we don't have?

where the american public has given a thumbs-up to the idea? >> i do not think that they have given a thumbs up. i think this last election was about what was what will hurt our growth. but nothing in terms of discussion about the money that gets wasted every year by this. he can pass all the tax hikes on ameeican citizens and it will never solve the problem. you can't reason enough tax dollars be one confiscating it all might be on the agenda. thank you for your work. i appreciate your good insight. okay, if you think the tea party is leaving cloud, think again. why this man is not stopping his fight over taxes. he is close to winning it, he says. and why alan simpson isn't dancing around the dead.

>> we need to move towards a single rate tax system. if we do that, america will prosper. charles: it looks like art laffer is for proving some new blood for the tax hike. senator mike leigh is joining the push for what he says is a cleaner and simpler and better tech solution. unlike dc outsiders coming actually has the power to do it. welcome to the show. senator, the flat tax has been an idea for four or five years now. you think thaa there is any sort of reception at this time? >> i certainly think that there needs to be.

i think this is a good opportunity for us to revisit the idea. when we have a president who is trying to pit one group of taxpayers against another, promising to increase government spending, we need to revisit the fact that anytime we raise taxes, even if it's only raising taxes nominally on the rich, we are making all americans were poor. charles: i do agree with that wholeheartedly. to be frank, this division -- getting one person against another -- i am digressing a little bit. think about four years ago at this time when everybody on both sides of the aisle, maybe this country will come closer together. now, we are being ripped apart because someone is marginally more successful than their neighbor. i find it to be despicable. what i also don't understand is

why republicans have not been able to articulate the message. in other words, the flat tax. what would you tell the person at home making $40,000 a year. thinking that the fat cats have advantages. why is the flat tax that are? >> we have to remember that our income tax system serves two purposes. one is to fund the operations of government. the other is to communicate to the voters the true coot of government. our current system performs the first function poorly because it produces a volatile inconsistent system. it deceives some americans into thinking that the government cost little or nothing. in fact, they pay for higher taxes on other brackets. it is paid for in terms of increased prices of goods and services and through unemployment and diminished wages. charles: i agree with you, once again. changing pace a little bit, monday night, representative john boehner asked several members of the tea party, the tea party getting a tremendous

amount of negative press. a lot of people saying that if they are done, let's stick a fork in him. what would you say to those people? >> the fact is that this grassroots political movement that started in 2009 is not going anywhere. it has become a part of what the republican party is. all americans agree that it has become too big and too expensive. that is what this movement stands for. this is an important part of our future. moving forward. a group of americans who are coming together, saying that we have to control government spendinn. charles: you have to give some credence people who might say that senator mike we would have five additional colleagues if not for some of these tea party candidates. >> that's absolutely false. anyone who says that doesn't understand the movement or is an enemy to the cause of conservatism itself. look at what we did achieve this

year. the new republican senators that we have, including ted cruz of texas and jeff blake and deb fisher from nebraska. those senate candidate lost in a large part because they got off the message. they stopped focusing on the basics of government downsizing and simplification. i think that's the message of government reform, perhaps they would have gotten elected. charles: i tend to agree. 100%. just for me, i happen to think of the tea party is phenomenal. i wish they would get back on the grass. forget about the websites for now and running for office. thank you for pushing the flat tax. senator, we appreciate your time. >> thank you. charles: the murder suspect john mcafee is on the run. we are following this next

you know how painful heartburn can be. for fast, long lasting relief, use doctor recommended gaviscon®. only gaviscon® forms a ottive barrier that helps block stomach acid from splashingp- relieving the pain quickly. try fast, long lasting gaviscon®. charles: the suspected murder john mcafee is on the run in central america. lauren antonetti is here with the details. >> it is better than most books. john mcafee used to live in belize. they say if you've been to belize, it is unbelievable. that is exactly what this story is. let's take you to the details. it started on november 9. that is one for of 11 dogs were

poisoned. mcafee later shot them to put them out of their misery. lo and behold, his neighbor shot [inaudible] in the head and died. that is when he left believes. he spoke to reporters and he kind of new what he was doing. we found a picture of him earlier this week on the third of december. he was in guatemala. it was taken there. he denied that's where was, but now we know he was holding a press conference in guatemala tomorrow. charles: this guy has always been something of a character. when he became rich, he said a lot of off-color things. now he has serious criticism from the government of belize. it would seem to me that at some

point, maybe we will get to the bottom of this. is there anyplace you can run? any country around him without an extradition treaty? >> he says he wants to stay in guatemala. he likes it and he likes the legal system. he feels safe there. he did not feel safe in belize. he was accusing the police are threatening the parents of his girlfriend. they planted drugs in his home. all of these things. he has been called insane. you know, he is a suspected murder, the police want to question him about his neighbors shooting and he is running. there are so many question marks on this gory. charles: it might be more than just a movie of the week. [laughter] there is no doubt about it that they had a whole lot of runs with each other, him and his neighbor. the police police have been called to the house on more than one occasion. it's not looking too good for

him. >> he had 11 dogs that bark all the time and girls and prostitutes over at all hours. his neighbor, he called the police on him and complain. but in mcafee's defense, he probably did kill his neighbor. charles: he could be charlie sheen's friend. that would be a sight to see. thank you, we will talk to you later. meanwhile, while everyone is worried about the economy plunging over the cliff, it looks like the funding for medical devices has already fallen over the cliff. investors are now pulling the plug. >> they make heart comes and stands and prosthetic devices for returning soldiers. they make devices to work on

brain tumors. what is happening is that obamacare, we are finding all sorts of odd taxes that are coming out. now, we are seeing the medical device tax is a big one. basically, this is a tax that will hit the medical industry, and it doesn't hit profits, it hits their sales. charles: the products that keep us alive and help us, by the way, when you say there is not going to be attacks a tax on the middle class, this taxes every person that may ever have to go to a hospital and meet one of these devices. >> yes, that's right. 43,000 jobs cut possibly in this industry. this is an industry that spends $10 billion annually. this is a 3 billion-dollar annual tax. they are projecting essentially that r&d will go overseas. we are seeing manufacturing jobs lost in this country and these guys are getting hurt.

800 ceos and medical groups sent a letter to the senate saying that saying that we want the repeal of this tax refund the fiscal cliff. it is a tax rate that is increasingly seen as unfair. it is willy-nilly. they say that they are increasing the number of people are insured. and they say wait a second, that's not how it works. charles: the same argument that they use, by the same token, it is so odd that they singled out medical device makers and tanning salons are it is like -- what the heck? singh that we need to go after those nefarious medical devices. we need to get those guys. charles: you know, at some point, people have to understand.

great innovation and breakthroughs will be delayed. it is hard to calculate how many, but there is no doubt that this will end up killing people. >> the issue is with venture capitalism, it's already pulled back. a 42% plunge in funding of medical device makers since last year. already companies like stryker announcing job layoffs. whether we see this as part of the fiscal cliff deal, we are pushing for it. charles: at some point they do need to address this. this hurts every single american in the wrong way. thanks so much. you know about a bad business? you might think twice about giving it a bad review. next, a woman's review on yelp

strikes online criticism.

charles: let me be brief, she posted on yelp. now, she need legal help her in being sued for $750,000 for posting this, do not put yourself through this nightmare of the contractor. the customer listed her complaints and said the jewelry was missing from her house. does this warrant a lawsuit? tamra holder says yes. rebekah arose what lynn says the contractor doesn't have a case.

>> you know what, there is no lawsuit for defamation. he is suing her and the responses -- it is true. it's not defamation when it's true. charles: that sounds pretty cut and dry. >> if you ask about her answer, i respectfully disagree. she has accused him of committing a crime. stealing jewelry from her home. where does the investigation? where are the criminal charges? charles: she said the jewelry was missing and the whole thing is a nightmare. >> a reasonable person would assume that if you're posting on yelp, the contractor didn't do the work -- part of it is also that the jewelry is missing -- a reasonable person will assume that it is that guy who stole it. charles: so the shoddy work

aspect of it was okay? >> there were issues as to whether he did the work or not. as much as freedom of speech goes. how much can people say online and how much is there a violation of it. >> people can say a lot online. if you interpret the first amendment rights of speech as well, this is the internet. i am posting what i feel happens. what i feel, my subjective opinion. that is something that we are all allowed. >> but what about the jewelry that is missing? >> the jewelry is a sticking point. i have not confirmed whether or not she didn't file charges with the police or not. it is very interesting that the contractor did not say anything about her not filing charges with the police. he just said that he did the work. >> are you saying that he is making an omission by not saying that what she said is --

[talking over each other] [talking over each other] >> and has nothing to do with the criminal aspect of the tory. >> you are saying that in his complaint he didn't bring up the jewelry missing. [talking over each other] >> she's not defaming him in that aspect. >> it lists every aspect. if you read it. it says i am suing because my work was not completed and it was not completed on time. >> he completed all of those things. charles: here is the thing though. if this is worrisome, in a country where there is free speech, if someone is a big money to do a job, there is a whole website dedicated to helping your neighbor not go through what you're going through. this lawsuit wins, doesn't that turn all that upside down? >> you know, defamation isn't necessarily, it doesn't get to the crux of whether people can post their opinions online.

it is a slippery slope. we have this problem on facebook. people posting things about other people on facebook and whether it is this or that, these are all issues that their are a gray area in. charles, there are attorneys and you can go online to see what combat is like by the regulatory body. that doesn't exist with regular companies. >> which is why people have been successful. there are a lot of people that i have hired to do work. >> that's right. someone has to evaluate them. you know, with his contractor to come ahead and sue for 750,000. he claims that this has hurt his business by $750,000, it is such an aggressive assault on this woman who just tried to protect others, if she had valid proof this work was not done, he is

going to face a definition suit as well. the map. >> that is not necessarily defamation? people sue each other all the time and counterclaims. charles: in other words he is calling her a liar. >> they are going to take a counterclaim suit and at the end of the day, i think this is going to get caught tossed out by the court. >> you have to prove the defamation. i don't think that $750,000 is that high. that's all of the perspective business. the guy makes $100,000 per year, this post is online forever. charles: you are assuming that everyone will be this? >> he can ask the court to

remove it if the court deems in the lawsuit that was an unfair post. that is one of the case. [talking over each other] [talking over each other] charles: this whole thing must be talked out. alan simpson, he does not like washington style. he is going gangham style. that is coming up next.

♪ charles: finally tonight, the video that has gone viral on us. you are about to cede your first. former debt commission co-chair alan simpson like you have never seen them before. ♪ >> stop enstar ramming your breakfast and tweeting your first world problems and getting on youtube so you can see gain

-- gangnam style. ♪ and start using those precious social media skills to go out and find people, three people a week. let it grow. don't forget, take part or get taken apart. these old coots will clean up the treasury before you get there. ♪ >> again. and then the lars. a cowboy. charles: he did the lasso part really good. going gangnam style over this debt. stop waltzing about this issue. but the debate is far from over, and we are hoping simpson is done dancing. if he releases a video of himself doing the electric slide, we will be